The shell shall expand the command substitution by executing command in a subshell environment (see Shell Execution Environment) and replacing the command substitution (the text of command plus the enclosing "$()" or backquotes) with the standard output of the command, removing sequences of one or more <newline>s at the end of the substitution. Embedded <newline>s before the end of the output shall not be removed; however, they may be treated as field delimiters and eliminated during field splitting, depending on the value of IFS and quoting that is in effect.

Enclosing characters in double-quotes ( "" ) shall preserve the literal value of all characters within the double-quotes, with the exception of the characters dollar sign, backquote, and backslash, as follows:

[, ], zz, yy, xx, ww become individual arguments (default IFS is whitespace) to the echo command & echo prints its arguments separated by a space.
You have used single/double quotes to define $THIS & $THAT respectively but it makes no difference as the quotes are not preserved in the shell variable.
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